Tuesday, January 25, 2011

Singapore: Will Rupert Murdoch knuckle under?

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Written by Eric Ellis

Friday, 11 January 2008

The media king’s purchase of Dow Jones & Co. has delivered some unwanted cargo in the form of a long-running libel suit.

In July of 2006, the Far Eastern Economic Review, reduced to a monthly shadow of its weekly former self, published a long and contentious interview with Chee Soon Juan, the harried leader of the opposition Singapore Democratic Party.

The magazine promptly found itself the recipient of a letter from Drew & Napier, the lawyers for the autocratic minister mentor Lee Kuan Yew, and his son, Prime Minister Lee Hsien Loong, demanding an apology.

The Review refused to apologize, and for a year and a half a libel suit has been dragging its way through the Singapore courts.

The only suspense is over how big the judgment will be against the magazine. The Lee family has never lost a libel suit in its own courts. And there’s the problem for media mogul Rupert Murdoch, who paid US$6.8 billion for a controlling interest in Dow Jones & Co. which, in addition to publishing the Review, also owns the Wall Street Journal and its international editions.

Unlike many of his competitors, Murdoch's titles have never experienced a Singapore libel action.

The city-state has rather been regarded by Murdoch’s News Corp as a place to raise money and do business – notably in 2001 when Murdoch briefly entered into a joint venture with Singapore's state-owned telecom company SingTel (then run by a son of Lee Kuan Yew) in an unsuccessful bid for Hong Kong's leading telecom company, when they were outmaneuvered by Beijing and Li Ka-shing’s son, Richard.

But with this libel headache now on Murdoch's desk, Singapore faces a media company run by a dominant individual who is an archly pragmatic dealmaker when it suits him. That could mean wriggle room for legal negotiation except that, with libel, the Lees always want absolute victory.

As an example of the Lees’ thirst for judicial blood, many international news organizations, including Time Magazine, the (pre-Murdoch) Asian Wall Street Journal, The International Herald Tribune, Business Week, Bloomberg and the Financial Times have lost suits in Singapore.

The Review’s sudden defiance is rare indeed.

The presumption of a loss is such that media companies routinely settle promptly and apologize.

The most recent, last November, was the Financial Times, which settled for unspecified damages and apologized in a case that according to non-Singaporean legal scholars contained no libel.

As with the FT, management usually decides that a quick settlement limits expensive legal bills –and possibly even higher damages if Lee lawyers insist mid-trial that publicly heard evidence has further harmed sensitive reputations, which prevents airing of issues that may be germane to the case.

In an earlier case involving the Review, the Anglo-Australian constitutional lawyer Geoffrey Robertson’s cross-examination of the elder Lee was so rigorous that a Singaporean judged awarded additional damages for his discomfort in the witness box.

The Lees have been the dominant political family in Singapore since the 1950s, about the same time Murdoch has been in charge of News Corp.

Both have helped build institutions of about the same size; News Corp's market worth approaches US$100 billion, Singapore's GDP is bigger.

Both are expert at projecting power, and neither brook any challenge to their authority, although media critics accuse Murdoch of knuckling under to Chinese authorities, for instance dropping the British Broadcasting System from Star TV’s stable of cable news programs broadcast in China, in an effort to curry favor.

In addition, Andrew Neil, the feisty one-time editor of Murdoch’s Sunday Times in London, lost his job after Malaysia’s then-Prime Minister Mahathir Mohamed took issue with the paper in 1994, just after Murdoch bought Star TV.

In the current case, the Review had argued, pre-Murdoch, that since it did not have an office or staff in Singapore, it should not be subject to Singapore law. It wanted the matter heard in Hong Kong, where it is based, and where it feels it would get a fairer hearing.

In a letter to Singapore's Information Ministry, which has sought a bond from the Review in lieu of presumed damages and Singaporean jurisdiction over the Review, Dow Jones's lawyers argue "its imposition on the Review, merely for the sake of making it easier for senior ministers of the Singapore Government to recover personal damages in a libel action, would be deeply regretted by all who care for the rule of law in your country. It is an exorbitant and unlawful demand that even totalitarian states have never sought to impose on media."

And that is where the matter has largely stayed since mid-2006, an exchange of testy lawyers' letters as Singapore throws out the Review's attempts to end the action . But then came Murdoch's successful bid for Dow Jones last year. Murdoch put in a new team, and much of the management that previously backed the Review's feistier approach to Singapore is no longer around.

The status of the case is unclear. Outwardly, it seems as if nothing has changed, and for now a Murdoch-owned Review is still taking on the Singaporeans. The articles and letters remain posted at FEER.com and the Review editors say it is still live, referring the matter to Dow Jones lawyers, who do not respond.

The matter is pregnant with the notion of what constitutes credibility – Singapore's own sense of it and News Corp's in the court of public opinion after the critical shellacking it received en route to the Dow Jones win.

Singapore's legal system is also under scrutiny.

The US embassy in Singapore has frequently expressed concern about "the ruling party's use of the court system to intimidate political opponents.”

The Australian lawyer Stuart Littlemore, who has observed Singapore libel cases for the International Commission of Jurists, says "the Singapore leadership has a long-standing record of using the High Court as a mechanism for silencing its opponents – by suing them for statements that, in any comparable jurisdiction, would be seen as part of a robust political debate inseparable from democratic freedoms, and by being awarded such unconscionably high damages and costs as to bankrupt the defendants, forcing them out of parliament.”

Credibility was at the heart of the Murdoch bid for Dow Jones.

There were numerous critics, notably in its own newsrooms, and including some members of the publisher's controlling Bancroft family (which quickly put aside its gripes in accepting the generous offer). The critics said Murdoch and his company had insufficient credibility to be custodians of venerable media assets like The Wall Street Journal and The Far Eastern Economic Review.

News Corporation prevailed after a searing battle in which Murdoch's personal and corporate reputation was assailed, almost to the point of him pulling out. Murdoch himself said bitterly that he was treated like a "genocidal tyrant.”

A significant aspect of the appeal of Dow Jones to Murdoch is its underplayed assets in booming Asia, a region where Singapore interests are hugely influential, both politically and commercially, and where Murdoch thinks he can add much value absorbing Dow Jones into the rest of the News empire.

But just as Murdoch has been cited as providing the type of media Asia does not want, notably by China, wealthy Singapore is often cited as a regional development model, particularly in effective one-party states like China and through Central Asia. Singapore is an important, if sometimes self-serving, voice in the so-called Asian Values debate.

It will be fascinating to see how the battle plays out, mindful of the messages it could send around a region where state control of media is evolving. Democracy and civil society are aching to burst out, but debilitating libel cases clearly are not yet dead, At least not in the Lees’ Singapore.

Portions of this article appeared previously in the Sydney Morning Herald.